Project detail - QUADRAN BURKINA FASO S.A.

QUADRAN BURKINA FASO S.A.

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Who is our client

FMO is investing into Quadran Burkina Faso S.A (“Zano”), an SPV established under the laws of Burkina Faso with a total syndicated debt of EUR 20.25 million. The Sponsor is Qair S.A.S formerly known as Quadran International, “Quadran” or “Qair”, which is the development arm of the French Renewable Energy company Lucia Holdings.

Funding objective

FMO’s loan of EUR 9.10 million (split equally between FMO-A and Access to Energy Fund (AEF)) will catalyse another EUR 9.10 million from Proparco both with an 18-year tenor. In addition, an EUR 2.06 million loan from AEF will be provided which has a 20-year tenor. This financing will allow for the development, construction, operation and maintenance of a 24MWp solar farm near Tenkodogo in Burkina Faso, with a total project cost of EUR 25.7 million.

Why we fund this project

This is a greenfield renewable energy development in a low-income sub-Saharan country. Zano will provide clean, reliable electricity to a country that has one of the lowest electrification rates in West Africa at a lower price than current thermal power stations. The FMO-A investment is highly additional as there are no commercial banks in Burkina Faso that can provide financing over the 18-year tenor required to make the projects work. The tenor extension of 2 years provided by the AEF tranche improves the bankability of the Projects without further depressing the margin on the senior loan to a level that would make FMO-A unsuitable. These are among the first true project financed energy IPPs in a Low-income country with poor access to electricity.

Environmental and social rationale

E&S Category B+, all IFC PSs triggered except PS7, as there are no Indigenous Peoples groups affected by the project. The key E&S focus areas include marginal economic displacement, security personnel, community engagement, benefit sharing and minimising impacts on biodiversity, including some biodiversity restoration. While local communities and authorities are supportive of the project, proactive management of the project-community relationship and avoiding project-induced intra-community tensions are key areas where the company will continue to focus their efforts, given the deteriorating security context in Burkina Faso, where minor issues can escalate fast. A project-specific environmental and social management system with plans and procedures addressing all relevant areas, including the above, will be implemented by the project company and cascaded down to contractors and subcontractors.

More investments

Date Total FMO financing
8/23/2021 EUR 2.06 MLN
8/23/2021 EUR 4.55 MLN
Region
Africa
Country
Burkina Faso
Sector
Energy
Signing date
8/23/2021
Total FMO financing
EUR 4.55 MLN
Fund
Access to Energy Fund
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
B+